1. Field of the Invention
The present invention relates to systems and methods of executing a remote negotiation for sale and post-sale verification of goods or services on an automated exchange or electronic system, particularly with respect to Internet commerce.
2. Description of Related Art
In traditional buyer and seller negotiation of collectibles, such as comic books, baseball cards, and the like, buyers find sellers of desired items through the distribution of catalogs or paper advertisements. Negotiation on price traditionally requires that letters, faxes or telephone calls be exchanged between a seller and prospective buyers. When an offer is made for an item, an entire round of communications is required where prospective buyer and seller go back and forth with offer and counteroffer until they settle upon an agreed price. Some advances in communications have made this process more manageable. Prospective buyers can search for sellers through Internet web sites, and they generally communicate with a seller via e-mail. This method, however, is, at best, cumbersome. Furthermore, this approach does not allow buyer and seller negotiations to occur in real-time where sellers can systematically evaluate bids rapidly upon submittal.
A recent innovation in sales has been to use the Internet to post items on third-party auction or listing web sites. These sites allow users to bid for goods and services in an auction or to purchase goods and services at listed prices. These systems are automated and capable of accepting a bid from a customer through e-mail, telephone, facsimile, mail, or through an online form. Bidding information is taken by the system and placed into a bid database, and a winner is selected based on the bid.
Auction or listing systems allow negotiation for items by one of two methods. One method provides buyer and seller autonomy. Sellers do everything involved with the sales process, from listing and describing the item on the site to sending the item to the buyer after payment is received. This method gives a substantial amount of flexibility for buyer and seller. However, buyers of items over the Internet frequently complain that after sending payments to unknown Internet auction and direct sellers they receive defective or misrepresented merchandise or receive nothing at all.
The second method is for the owner of the merchandise to agree to a reserve price with an auction house or third party site and to send the item in advance to the third party to sell on consignment. After the item is received and the third-party has physical possession, it does everything in the auction or sales process. This system offers less autonomy for the seller in the sales process, but is more secure for the buyer because a third party verifies the item prior to advertising it in the auction. It also enables the company to act as third party arbitrator for any disputes that may arise. This second method increases the likelihood of a smooth post-sale transaction and increased likelihood of buyer satisfaction.
Security brokerage firms for years have used automated transaction systems for matching buy and sell orders for securities. For example, NASDAQ's SOES (Small Order Execution System) system offers complete electronic matching of buyers and sellers. However, this system does not facilitate back and forth negotiations between individual buyers and sellers on unique, individual items. It merely pairs buy orders with sell orders of a standardized commodity when the pricing criteria of both sides of the trade are met. Similarly, a system has been developed in which similar collectibles trade as a single commodity on a collectible exchange much like the stock market. There is a set sell price and a set buy price. The item sold is a standardized commodity which is interchangeable with other items sharing the same description. Prospective buyers or bidders cannot choose a unique item for purchase. For example, a Barry Bonds 1987 Fleer baseball card in a particular condition may be listed on a site. Though many such cards are available, only one Barry Bonds card is pictured and users cannot choose the exact card for purchase. There are frequently differences in the quality of similar items, and bidders prefer to see the exact item upon which they are bidding. When a buy order price matches a sell order price, a standardized item is sent to the third party exchange that in turn sends it to the buyer. While verification of the merchandise may occur, only certain specifications are verified. The buyer receives a standardized item that matches the specifications that they request. These exchanges do not enable negotiation between an individual buyer and seller. Individual offers are not relayed to sellers of items so sellers are unable to respond to buyer activity. Likewise, bidders are not able to respond to seller activity. It is also not possible for a seller to submit a counteroffer in response to a bid, and for the two to negotiate back and forth.